Bangkok--May 18--UN Information Services
The Asia-Pacific region's infrastructure needs are overwhelming, both in social and physical infrastructure, UNESCAP's Executive Secretary Mr. Kim Hak-Su warned delegates of the Ministerial Segment of the 61st Commission Session of the
United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).
The 61st Commission session aims to find ways to create financing for
development.
According to a recent study by World Bank, ADB and Japan Bank for
International Co-operation, the region needs more than $200 billion per year, which far exceeds the available resources of around $50 billion for all purposes. Private investment in infrastructure is one-fourth of the levels prevailing before the 1997 crisis. This has created a large financing gap.
UNESCAP investment estimates for desperately needed infrastructure are
massive.
For the Asian Highway, an additional $18 billion will be required just to
finance priority projects. The Trans Asian Railway would also need substantial investment. For example, one route from Singapore to Kunming will cost $2.5 billion.
The costs of regional connectivity infrastructure such as Internet
connections, cabling and broadband are also substantial.
The gap is exacerbated by a decline of private investment for infrastructure since the Asian Financial Crisis in 1997. East Asia private infrastructure investment declined from $40 billion in 1997 to $11.5 billion in 2003.
The region faces major challenges in securing funding for infrastructure.
"We must mobilize regional domestic savings and further engage the private sector in infrastructure investment," said Mr. Kim.
"At this stage of transformation, Asia and the Pacific region requires an
institution like the European Investment Bank (EIB) - an independent, government-owned Asian Investment Bank to promote regional capital markets," he said.
Mr. Kim said an AIB could provide infrastructure loans and collaborate with the banking community in both raising and investing resources. "The AIB
could work with private sector by co-financing and guaranteeing private investment financing. Asian capital markets are faced with limited capacity to finance large and risky infrastructure project and we need an alternative."
Regional investment in other countries in the region is also increasing.
The region receives foreign direct investment of over US$100 billion a year, but concentrated in a dozen countries led by China; Hong Kong, China; Singapore; Republic of Korea and India. The outward flow of FDI from
countries in the region is also rising. In 2003, the outward flow of FDI by
Singapore was $5.5bn in 2003, followed by the Republic of Korea at $3.4bn.
UNESCAP aims to help channel FDI to the region's poorer countries. It also aims to stimulate intra-regional trade that also benefits poorer countries.
"We must harmonize bilateral trading arrangements (BTAs), and Free trade Agreements (FTAs) with multilateral trading arrangements," Mr. Kim said.
"The Asia-Pacific Trade Agreement (APTA) addresses these issues," he said.
UNESCAP would assist the region achieve its infrastructure goals with a three-track strategy of promoting technical cooperation in finance, trade
and investment; forging greater cooperation among sub- regional groupings to achieve integration and creating a Knowledge Management Centre to share experiences of Financing for Development.
The Session will conclude on 18 May with the adoption of a report containing resolutions and a summary of the discussions.
NOTE TO EDITORS
Please kindly be reminded that there will be a Press Briefing of the conclusion of the 61st Commission Session by Mr. Kim Hak-Su, Executive
Secretary of UNESCAP, and the Conference Chairman, H.E. Mr. Kassymzhomart Tokayev, Foreign Minister of Kazakhstan, on Wednesday, 18 May at 11:00 to
12:00 am at the UNCC Theatre. All media representatives are cordially invited to attend.
For further information please contact:
Mr. David Lazarus
UN Information Services Bangkok
Tel: +(66-2) 288-1861-69, Fax: +(66-2) 288-1052
E-mail: [email protected]
http://www.unescap.org/ End.